Small Business and Business Software

My Small Business Is Killing Me

My Small Business Is Killing Me – Summary Diversify your product line. Stick to your knitting. Hire a professional manager. Track fixed costs. Here are some tips that entrepreneurs sort out when they are trying to get their business off the ground. Why all the conflicting advice? Because in a young company, everyone is ready to make decisions. Based on his observations of several hundred business startups over eight years, Amar Bhide has developed a three-step series of questions that all entrepreneurs should ask themselves to identify the opportunities and problems they face. they? My goal? Do I have the right strategy? Can I apply the strategy? Before entrepreneurs can set goals for their business, they need to clarify their personal goals. For example, they may want to achieve a certain lifestyle, experiment with technology, or create an organization that outlives them. Only when entrepreneurs decide what they want from their business can determine the type of company they should build, the type of risk they are willing to take, and whether they have a well-defined strategy. Great strategy, however, does not guarantee great execution. A business can fail if the founder does not hire the best people, attract capital, invest in organizational infrastructure, and build a culture to align with the business strategy. Founders must also consider the evolution of their personal roles. Entrepreneurs cannot build independent companies by simply “leaving it.” When they imagine the future, entrepreneurs must manage as if the company will be under. They must constantly acquire new skills – and constantly ask themselves where they want to go and how they will get there.

Of the hundreds of thousands of business ventures that are started each year, many never take off. Others fade away after a spectacular rocket.

My Small Business Is Killing Me

My Small Business Is Killing Me

Why such a bleak prospect? Entrepreneurs—with a bias for action—often overlook essential elements for business success. This includes a clear strategy, the right workforce talent, and organizational controls that encourage performance without stifling employee initiative.

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Additionally, no two businesses take the same path. Entrepreneurs thus cannot see a formula for navigating the many options that arise as their business evolves. A decision that is right for one company can be disastrous for another.

Entrepreneurs are constantly asking tough questions about where they want to go — and whether the track they’re working on will get them there.

Of the hundreds of thousands of business ventures that entrepreneurs start each year, many never take off. Others fade away after a spectacular rocket.

The six-year-old spice company has attracted loyal customers but generated less than $500,000 in sales. The company’s gross margin may not cover its overhead or provide sufficient income for the founder and family members participating in the business. Additional growth requires a large capital investment, but investors and potential buyers are not interested in profitable small businesses, and families have exhausted their resources.

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Another young company, profitable and growing rapidly, imports new products from the Far East and sells them to large US chain stores. Its founder, whose paper fortune is several million dollars, has been nominated for the entrepreneur of the year award. But the company’s phenomenal growth has forced it to reinvest most of its profits to finance the growth of business inventories and acquisitions. In addition, the company’s profitability has attracted competitors and enticed customers to deal directly with Asian suppliers. If the founder doesn’t do the right thing, the business will dry up.

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Like most entrepreneurs, spice makers and importers have recently received a lot of confusing advice: Diversify your product line. Stick to your knitting. Raise capital by selling equity. Don’t risk losing control because something bad is going to happen. Messenger Act decisively. Hire a professional manager. Track your fixed expenses.

Why all the conflicting advice? Because the variety of choices – and problems – that young business founders face is huge. A thoughtful corporate manager might ask, what business are we in? Or how can we leverage our core competencies? Entrepreneurs must constantly ask themselves what their business is

My Small Business Is Killing Me

To develop. Likewise, the organizational weakness and shortages that entrepreneurs face every day cause mature company managers to panic. Many young businesses simultaneously lack a coherent strategy, competitive strength, talented employees, adequate control, and clear reporting relationships.

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Entrepreneurs can deal with only one or two opportunities and problems at a time. So, just as a parent should focus more on a child’s motor skills than their social skills, employers should separate critical issues from common pain points.

Employers cannot expect the kind of guidance and comfort that an authoritative parenting book can provide. Humans go through physical and psychological stages in a more or less predetermined order, but companies do not share developmental paths. Microsoft, Lotus, WordPerfect, and Intuit, although competing in the same industry, did not evolve in the same way. Each of these companies has its own story to tell about the development of strategy and organizational structure and the evolution of the founder’s role in the business.

An option that is suitable for one entrepreneurial venture may be completely unsuitable for another. Entrepreneurs have to make many shocking decisions, and they have to make the right decisions for them. The framework and rules of thumb I present here will help entrepreneurs analyze the situation they find themselves in, prioritize the opportunities and problems they face, and make rational decisions about the future. This framework, based on my observations of several hundred startups over eight years, does not provide the answer. Instead, it helps entrepreneurs ask useful questions, identify important problems, and evaluate solutions. This framework applies whether the company is a small print shop trying to stay in business or a catalog retailer looking to sell hundreds of millions of dollars. And it can be used at almost any point in business development. Entrepreneurs should use the framework to assess the state and trajectory of the company—not just when problems arise.

The framework consists of a three-step series of questions. The first step clarifies the entrepreneur’s current goals, the second assesses the strategy to achieve those goals, and the third helps them assess their ability to implement their strategy. Hierarchical organization of questions requires the entrepreneur to face important and big problems before thinking about improvements and details. This approach does not assume that all companies—or all entrepreneurs—grow in the same way, so it does not recommend a one-size-fits-all method for success.

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An entrepreneur’s personal and business goals are inseparable. While managers of public companies have the responsibility to maximize value for shareholders, entrepreneurs build their businesses to meet personal goals and, if necessary, seek investors with similar goals.

Before they can set goals for their business, entrepreneurs need to be clear about their personal goals. And they should periodically ask themselves if that goal has changed. Many entrepreneurs say they start their business for independence and control of their own destiny, but that goal is vague. If they stop and think about it, most entrepreneurs can identify more specific goals. For example, they want an outlet for artistic talent, the opportunity to experiment with new technology, a flexible lifestyle, the rush of rapid growth, or the permanence of building an organization that reflects their deepest values. Financially, some entrepreneurs are looking for a quick profit, some want to generate satisfactory cash flow, and others are looking for capital gains from building and selling a company. Some entrepreneurs who want to build a sustainable organization do not consider personal financial returns a high priority. They may reject acquisition proposals regardless of price or sell cheap equity to employees to secure loyalty to the organization.

Only when entrepreneurs can articulate what they want from their business, it makes sense for them to ask these three questions:

My Small Business Is Killing Me

Long-term stability does not matter to entrepreneurs looking for a quick profit from an in-and-out deal. Likewise, so-called lifestyle entrepreneurs, who are only interested in generating enough cash flow to maintain a certain lifestyle, don’t need to build a business that can survive without them. But sustainability — or the perception of it — is crucial for entrepreneurs hoping to eventually sell their businesses. Sustainability is even more important for entrepreneurs who want to build organizations that are capable of renewing themselves as technology, employees, and customer generations.

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An entrepreneur’s personal goals should also determine the target size of the business they are starting. Lifestyle entrepreneur businesses don’t have to be huge. In fact, a business that is too big can prevent the founder from enjoying life or being personally involved in all aspects of the work. Instead, entrepreneurs looking for capital gains must build companies large enough to support an infrastructure that does not require day-to-day intervention.

Building a sustainable business—that is, one whose primary productive asset is not just the founder’s skills, connections, and business—often involves making risky long-term bets. Unlike independent consulting practices—which make money from scratch—sustainable businesses, such as companies that produce branded consumer goods, require continuous investment to build sustainable profits. For example, entrepreneurs can

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